I keep hearing that phrase. "The AI bubble is going to burst" but...

What does it means? What impact will that have for regular people? Will it truly happen? What does needs to happen for it to burst?

I only want apps to stop embedding any for of AI as a new function, hate it

In my opinion, the market is ripping right now simply due to most of the AI companies with actual consumer facing products and software still being private. The public companies (Mag 7) are almost all making money by selling chips or selling compute, but eventually the companies at the end of the chain (ie. OpenAI) buying the chips & compute need to make money.

People know OpenAi isn’t making money, but no one seems to care. I feel like once OpenAi’s financials are all available , investors will realize it’s just not as profitable as they anticipated or the profits won’t come as quickly as they want, and demand for everything AI related deflates. I mean if OpenAI can’t show a clear path to profitability, the company that’s being given every financial handout available, then how would other AI product or service companies stand a chance?

People keep comparing today’s AI market to the Dotcom bubble, but the structure is fundamentally different. Back then, the market was dominated by hundreds of small, non-viable companies with no revenue and no real product. Today, the core of the AI build-out is driven by the most profitable, cash-rich companies on the planet: Microsoft, Google, Amazon, Apple, Meta, NVIDIA, Broadcom, and the hyperscalers. These firms have actual products, real demand, and business models that already scale.

What is similar to the Dotcom era is the valuation stretch and the expectation curve. We are in a CapEx Supercycle where hyperscalers are pouring unprecedented amounts of money into GPUs, data centers, power infrastructure, and model development. This phase cannot grow linearly forever. At some point, build-out slows, ROI expectations tighten, and the market will reprice.

When that happens, here’s what to expect:

Winners: diversified hyperscalers, cloud platforms, chip manufacturers with real moats, and software ecosystems that can monetize AI at scale.

Survivors but volatile: model labs, foundation model vendors, and second-tier hardware companies that depend on hyperscaler demand cycles.

Casualties: AI “feature startups,” companies without defensible tech, firms relying on perpetual GPU scarcity, and anything whose valuation implies perfect execution for a decade.

This isn’t a bubble waiting to burst into nothingness but a massive, front-loaded investment cycle that will normalize once infrastructure saturation and cost pressures kick in. The technology is real, the demand is real, and the winners will be even large, but the path there won’t be a straight line.

Edit: Thank you all very much for your posts and discussion. This seems to be a very controversial topic, but this is also something where everyone can learn.